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As 2016 comes to a close, Roanoke Underwriting is taking a look at some of the top trends in the global logistics sector. These trends include the “uberi-zation” of trucking, warehouse “robotization” and the use of wearables in warehouses.

A growing number of trucking companies are experimenting with Uber-like applications and services to move freight. Similar to the ride-sharing boom that has transformed what was once the domain of taxi services, these companies are looking to do the same in the large-scale commercial shipping industry. And while moving freight long distances by truck quickly, safely and inexpensively is a lot more complicated than driving a stranger to the airport in a shared car, the “uberi-zation”of trucking may soon become a reality.

“Customers expect visibility and control of inventory and transportation in their supply chains. We’re continually on the lookout for new technologies that can give them more control so we both operate more efficiently,” says Juan Perez, Chief Information Officer at UPS, in an article that appeared in the Wall Street Journal (WSJ).

New apps and services with names such as Transfix, TugForce, LaneHoney, DashHaul, and Cargomatic are helping shippers see available trucks nearby and book directly with a click instead of through a broker. The on-demand services generally work by connecting drivers seeking loads with companies looking to move goods. These Ubers of trucking act as intermediaries, essentially replacing traditional brokerages that do the same job. Their claim is that they’ll provide the same services, just more efficiently and in a more technologically advanced manner. “My goal is to bring transparency to the market and provide a platform where users make the prices,” says Roseanne Stanzione, founder, and CEO of LaneHoney, in the WSJ article.

Not everybody, however, is convinced that these on-demand companies will offer anything new, other than a 21st century spin on what large brokerages have done for decades. “It’s not as simple as starting a website, finding truckers and shippers, and connecting them. Billing, tracking, and tracing are among the services that traditional brokerages provide,” Morningstar’s Matt Young said in an article in Trucks.com. “There’s a lot of hand-holding going on,” he said. “A lot of that has to be handled by phone calls, so it doesn’t necessarily lend itself to a pure linkup on a website, Uber-style.” Young said he doesn’t foresee these services all of a sudden usurping traditional brokers.

Another trend disrupting the global logistics is the “robotization” of the warehouse. Most large Internet commerce companies rely on small armies of stock pickers who walk miles each day through massive warehouses to gather goods for shipping. For example, Amazon alone hires more than 80,000 stock pickers for the Christmas rush, making it a prime target for automation. Now enter the robot stock picker, which is already starting to revolutionize warehouse logistics. In the summer of 2015, more than 15,000 Kiva Systems robots began gliding through 10 of Amazon’s U.S. warehouses, picking up goods and reducing the distance human workers have to walk to find products. While a robot can’t pick and pack products with the speed and reliability of a human in an unstructured environment as of yet, the technology is developing quickly. In fact, Amazon is facilitating this technology advancement, having held its first “Amazon Picking Challenge” in 2015 where 31 robot-designing teams from around the world competed, and then following up this past summer with its “RoboCup 2016.

In addition, the next big advance in logistics tech could be augmented reality: wearable digital systems that promise to reinvent the costly and cumbersome picking-process in warehouses. Wearables refer to devices often connected to the Internet or to other devices worn on the body that can be used to enhance communication to and from the users. For example, many warehouses today still use a paper-based approach to stock picking, which is slow and error-prone. A temporary warehouse worker, perhaps hired for the busy holiday season, picks and stages an order in pallet, case, and unit quantities. A manager then reviews the order for item accuracy, quality of items and appropriate labeling. Despite best efforts and oversight, pick inaccuracy does occur and could cost the manufacturer money. Now, imagine if that the picker wore a device equipped with a camera that scans the barcode on the item before it is picked. The employee would know immediately whether the correct item was pulled and would be able to make any changes as needed before it gets to the customer. Additionally, the entire staged order can be checked for damage, labeling correctness and order accuracy without the supervisor performing a manual inspection. Efficiency is optimized and the risk of shipping the wrong item(s) is significantly reduced, resulting in more streamlined warehouse operations and satisfied customers.

About Roanoke Underwriting

Roanoke Underwriting serves the commercial marine insurance and customs bond needs of agents and brokers throughout North America working with supply chain risks and logistics service providers. For more information about our products, please contact us at 1.855.213.4545.